The man, wearing a mask and carrying a sawn-off shotgun and a knife, tied up and killed the woman who worked at the home in the village of Montferrier-sur-Lez near Montpellier.
More than 70 men and women who have served as missionaries in Africa live at the home.
Armed police searched the building but believe the man fled, sources close to the police operation said.
Investigators have no evidence at this stage to suggest the attack was terror-related at a time when France remains under a state of emergency following a string of jihadist atrocities, including the murder of an elderly Catholic priest in July.
"For the time being, there is only one victim," Montpellier prosecutor Christophe Barret told AFP. "For the moment there is no particular evidence about the motive for this crime."
The man was not known to authorities.
Residents of the home "are very elderly with an average age of 75 although some are more than 90," said Alain Berthet, a local councillor in Montferrier-sur-Luz.
Many of the residents require assistance to walk, he said.
The secretary general of the French Bishops' Conference, Olivier Ribadeau Dumas, said in a Twitter message: "Our prayers tonight go to the woman who lost her life in this attack on a retirement home."
